Property audit sends shockwaves in the market

By Ally Jamah

Tension is brewing in the property market as the Government plans to conduct a property audit in Nairobi and Mombasa.

A section of property owners, mainly from the Somali community is opposed to the move saying it is a veiled witch-hunt akin to ethnic profiling.

Early this month, Internal Security and Provincial Administration PS Francis Kimemia announced the Government’s plans to conduct a property audit in Nairobi to determine owners of buildings and the source of their money.

tough task

Later, Internal Security Minister George Saitoti said the exercise would be extended to Mombasa, where Somali businessmen own significant stakes in the coastal city’s real estate market.

The planned audit came amid rising concerns that illegally acquired money was making its way into the country’s property market and fuelling a steep rise in prices.

The announcement sent tremors through the country’s property market despite Kimemia’s repeated assurances that the audit is not targeting one particular community.

"We do not oppose the audit but we are concerned that some of us may be victimised or be compelled to part with huge bribes," said a businessman in Eastleigh who refused to be named.

The standoff between property owners and the Government now threatens to disrupt the booming real estate market.

While the Government insists on going ahead with the controversial exercise, the Somali entrepreneurs, with the backing of political leaders from North Eastern Province are holding their ground that they will not cooperate.

Last week, Defence Minister Yusuf Haji bluntly advised the businessmen against cooperating with Government, terming the exercise illegal and discriminatory.

"I urge you to ignore the audit because it is unfairly targeting one community. It is illegal. We are not happy witnessing the harassment of Somali investors," he said.

He said the audit could be conducted more professionally through the Lands Ministry where all relevant documents are kept.

Haji’s stand contradicts that of the Internal Security Minister, a fact that only multiplies the confusion and uncertainty over the implementation of the plan.

Somali investors in Kenya are still struggling to shake the perception that their investments are linked to piracy off the Coast of Somali, which have raked in millions of dollars in ransom from vehicles plying the coastal line.

Some pundits indicate that some of that money may have been invested in Kenya, especially in the real estate industry.

But others lament that the Somali business community in Kenya has long been victims of witch-hunt even as they struggle to make ends meet.

Yusuf Mohammed, a Somali entrepreneur owning several commercial buildings in Eastleigh, says his investments have been growing gradually since the 1990s. "Piracy is a recent phenomenon while our businesses have been in place for many years," he says.

Fear of victimisation

Somali entrepreneurs have invested billions of shillings into the country, with significant amounts of the money going into the real estate market.

Somali-dominated areas have seen phenomenal growth with new gargantuan shopping complexes rising from the rubble of demolished structures.

According to Billow Kerrow, a former MP and economist, the audit will throw cold water on future investments in the real estate industry owing to investor perception that they could easily be victimised by government policies.